The aviation ministry has accepted the recommendations made by a government constituted committee that was formed to suggest cost-cutting measures for the bleeding national carrier.

The committee had made 46 recommendations, implementation of which would result in an annual estimated saving of Rs. 3,240 crore.

One of the main recommendations included serving only tea, coffee, cold drinks, peanuts and biscuits free of cost to economy passengers. Passengers would have to pay for a meal.

“An average domestic meal on an AI flight costs Rs. 175 and implementing this recommendation will bring down the same to Rs. 25. The total saving estimated from this front alone is Rs. 100 crore per annum,” an official said.

“The ministry has written to AI to implement the recommendations and provide an implementation schedule within a week,” the official added.

The committee had also asked AI to charge passengers for preferential seats. On April 29, aviation ministry allowed airlines to unbundle charges of services such as preferential seating, meals, snacks, drinks (except drinking water), the use of lounges and baggage.

AI will not cut fares and its emulation of low-cost airlines is just limited to charging for food.

Following the announcement, AI and Jet Airways have lowered the free baggage allowance in economy class from 20 kg to 15 kg and will charge passengers Rs. 250 for every kg that exceeding the limit. Low-cost IndiGo has decided to charge passengers for seats of their choice on both domestic and international routes. Other airlines like SpiceJet and GoAir are likely to come up with similar charges.

The aviation ministry’s decision comes in the wake of AirAsia India getting the nod from finance ministry to launch a local airline. Revenues from ancillary services constitute a significant proportion of revenues for global low-cost carriers like AirAsia.